Why I bought Ebay stock
As some of you already know, I like stocks with wide moats like the Washington Post. Ebay has lots of competition, but it’s kind of like the ‘zine’ I started in high school trying to compete with an established paper like the Washington Post. To really compete with Ebay is going to cost a fortune. The cost is so prohibitive, that Yahoo has all but given up on their auctions.
Yes, I remember a time when many Ebay sellers also used Yahoo because there was no listing fee. There were also no buyers so we quicly stopped wasting our time. Then Yahoo did begin charging a listing fee. I don’t know what happened to Yahoo auctions, but I guess they died.
So anyway, I like Ebay because it’s hard for new companies to compete. Ebay has been declining recently. At 28.5o right now, PE is close to 40 but forward PE is 22.63. PEG is a decent 1.32.
I also think that new deal with Google (where Google supplies ads to Ebay) will be a big success. People spend leisure time on Ebay, meaning that they are ready to take hours looking for things they want to buy. That’s the other key; they want to buy. Take someone who wants to buy, put ads in front of them for a few hours and I bet they start clicking.
As always, I can give you advice. But I can tell you what I’m doing so that you can go do your own stock research and decide for yourself.